Thursday, July 5, 2007

Scotiabank & brian acker

You may have noticed that I recently added Bank of Nova Scotia (BNS) to my list of 'cheap' stocks, which I evaluate on my watchlist. These are stocks that are currently trading significantly below my fair value estimate. BNS is trading below $52 per share and my fair value estimate has recently been revised to north of $58. In my opinion BNS is the most attractive Canadian bank right now on valuation. Unless BNS's eps growth rate slows significantly over the next few quarters and/or years, I believe today's price is an excellent entry point for a mid to long term hold. I may start a position in BNS soon if the price stays flat or declines at all from here.

One of the guests that appears regularly on BNN is Brian Acker from Acker Finley. Brian is one of the guests that I enjoy most, as I find his 'no-nonsense' valuation based look at large cap companies makes sense, and is easy to understand. I employ a similar 'model price' based method, with some more qualitative research, when I evaluate companies on my watchlist.

Coincidentally Brian has just recently added BNS to his top holdings in his Select Canada Focus fund for July. Brian has taken a large 7.9% position in BNS just this month. Recently as well he has added a BMO position which he as boosted to 8.3%. Check out Brian's website for his other top Canadian and U.S. holdings which are updated monthly in the bottom right corner of the homepage.


Anonymous said...

Yeah Brian Acker is my favourite guest on ROBtv. As you say, no-nonsense, thorough, and not a fad-follower. I reckon he's the next best thing to indexxing, and his funds are some of the few I would consider investing in (the MERs are very competitive as well) if I was looking for active management.

Deborah said...

I think the rising interest rates are going to hurt the banking sector. I don't like it at all.